Finance

In economics,  Finance is concerned with allocation of resources, as well as resource management, acquisition and investment.  In other words, Finance deals with money and the markets.  Finance is the management of money and other assets, banking, investments, and credit.  Finance is also the study of money.  “To finance” means to provide funds for business.

Finance also means fund management.  It can be divided into 1) Business Finance, 2) Personal Finance, and 3) Public Finance (government).

Finance is also saving money and lending money.  Finance is also how money is allocated to various expenditure, and how it is budgeted and allocated.  Finance also deals with the concept of time, money and risk, and how they are inter-related.

Finance is also money deposited into the banks by individuals and businesses.  The banks, in turn, lend the money to other individuals and/or companies for their use or investment, and `interest`  is charged on these loans.

Banks play a major role of facilitating funding through the provision of credit.  There are also private equity, mutual funds, hedge funds, and other organizations which are important as they invest in various forms of debt (loan).

Financial assets are known as `investments`, and financially managed along with financial risk management to control risk.

There are also financial instruments which allow many forms of securitized assets to be traded on securities exchanges such as stock exchanges, including debts (bonds), and equity in publicly traded corporations.

A country`s central or federal bank is very important and a strong player in public finance, acting as a lender of last resort and is a major influence on the monetary and credit conditions in the economy of a country.

For our purpose Business Finance or Corporate Finance definition is important to know, which according to Britannia Concise Encyclopedia, means:-

Questions:

• What is Finance?  Explain.
• Define Corporate Finance.